YOUR MONEY : The Importance of Fund Investment Style : Portfolio: Experts agree the major distinction for most investors is between growth and value investing.

Does your fund manager have style?

We don’t mean the Donna Karan dress or the Armani suit.

We’re talking investment styles here: growth as opposed to value; top-down, macro-economic, sector-rotating, relative valuation, country allocation kind of style. Or maybe the always stylish bottoms-up look.

Fund names are supposed to give you a clue as to what your fund is doing. But sometimes the names are so bland that the descriptions are the next best thing--if you can decipher them. Consider one newsletter’s explanation of a couple of international funds. It labeled the first “a value-driven, top-down/bottoms-up blended investment style” and another a “combination of top-down analysis, with thorough price sensitive growth stock picking.”

All this may sound esoteric, but investment style is important in designing a portfolio. And the comparison to clothing holds true: You have to decide what you feel comfortable with, how to accessorize it with a little mixing and matching of styles, and you have to be wary of the latest fashions.

Experts agree that the major distinction for most people is between growth and value investing, because these two styles cut across all categories, from small-cap to large to international funds.

Simply, value investors seek companies that are undervalued and decide what price to pay based on current earnings. Growth investors are willing to pay based on estimated future earnings.

These two styles tend to alternate with each other as the markets and the economy move higher and lower. Jay Gilburn, senior analyst for Value Line Mutual Funds, notes that some growth funds that did well from 1989 to 1992 when growth stocks were in vogue are doing poorly in the current value-stock cycle.

Michael Lipper, head of Lipper Analytical Services Inc., uses baseball metaphors to emphasize that investors should consider splitting their money among each kind of manager: “We believe in diversifying, because you don’t want a lineup of all right-handed hitters.”

That means you don’t want to have only five growth funds in your portfolio, Gilburn said. It is probably better to have some value and some growth.

But beyond that, how much do investors need to know? Does it matter whether the manager has a top-down philosophy--looking at the country and its economy first before looking for a company--or a bottoms-up philosophy that seeks good companies and then analyzes them in the context of their industry, their location and the economy? Similarly, does it matter whether the manager uses computer models to pick stocks from his office, or lives on airplanes going from city to city in search of good companies?

“It matters more who is doing the thinking,” said Manhattan financial planner Lewis Altfest.

“I really don’t think investors need to know all those things,” agreed Kurt Brouwer, a partner in a San Francisco mutual fund advisory firm. “They need to see what kind of risk they are taking and how the fund has done compared with indexes. They want good, solid funds that have done well in down markets.

“But when managers talk about the top-down economic overlays on securities--I don’t think investors really need the masturbatory remarks.”

John Markese, research director of the American Assn. of Individual Investors, doubts that most investors know or need to know if their managers are top-down or bottoms-up: “I don’t know that there is any evidence that shows one to be better than the other.”

Nevertheless, both Brouwer and Markese think bottoms-up stock pickers have been more successful, though they recognize that some managers can guess right about picking the right country at the right time.

But no matter which theory lurks in the background, the style investors should care about most is one where their interests are foremost in the manager’s mind at all times.